A growing percentage of people with unmanageable debt or student loan debt are senior citizens.
A recent Georgetown University study documented the cultural and financial fallout of elderly debtors. The number of people aged 60 and over with student loan debt numbered 700,000.
That estimate later exploded to over 2.8 million.
In a single year, more than 114,000 senior citizens had their Social Security benefits garnished or deferred to pay over $171 million in unpaid student loan debts.
A lot of senior citizens aren’t just paying for their children’s or grandchildren’s tuition. They are also wholly paying the rent and bills for their children.
If you are a senior citizen or nearing retirement and paying your children’s bills, you need to stop now.
And don’t start if you are considering it. Your retirement and quality of life depend on it.
Stunted emotional growth
It’s a stark truism, but children are supposed to bury their parents.
What parents would be comfortable as they age knowing that their grown children are financially illiterate, incapable of independence, and will always need someone to take care of them and pay their bills?
You do your children no favors by paying their bills and tuition. They will never be incentivized to learn personal finance, make their own money, and be independent to survive in the world.
Let’s imagine that you cut your child off from financial support. Almost like an alcoholic or drug addict you’ve now cut them off from everything that they take for granted.
Being independent, paying their own bills, or getting a job is something that may have never occurred to them before.
Be prepared for strained relations or to become estranged from your adult children. This is a serious likelihood if you have paid their bills all of their lives.
Try to get the counsel and advice of a financial adviser. And try to get your adult child involved to help them adjust to independence.
Protect your retirement and future finances
Unless you started having children in your 50s, the adult children you have are middle aged. If they were comfortable with you paying their bills into their middle age, they will expect you to pay as you age into your 70s and 80s.
Don’t pay tuition for your grandchildren either. Help them apply for scholarships or encourage them to apply to affordable schools.
If you don’t cut off the financial dependence of your grown children, you may find yourself with garnished Social Security benefits and sacrificing your retirement altogether.